Taiwanese ODMs lose grip on notebooks

The Taiwanese industry is loosening its traditionally strong grip on global notebook shipments, according to a report, as competitors from the USA and particularly China muscle in on its territory.

HP and Lenovo are tipped to ship as many as 28 million notebooks next year. But unusually for the latter, Lenovo will seek to outsource just 40 percent of its notebook orders compared to 75 percent in 2013, with in-house production accounting for 16.8 million units – or 60 percent – instead.

In 2013, the in-house figure is 25 percent of Lenovo’s total production at 6.7 million units.

This is a significant switch of tactics as Lenovo overtook HP to become the top notebook brand vendor for the first half of 2013.

Lenovo won’t be internally manufacturing all notebooks, because it’s necessary for the company to keep alternative production lines open. However, Taiwan’s ODMs are going to notice.

The report, put together by Digitimes Research, estimates Taiwanese share of global notebook shipments will fall to 82.9 percent in Q3, and further to 81.5 percent in Q4 of this year.

As Lenovo seeks to continue stealing the march on competition, it will look locally to Chinese companies – allowing the firm to cut costs and put even more pressure on rivals, including those in Taiwan.

HP, meanwhile, is expected to pick up orders from enterprise and government sectors over the second half of 2013, which should boost its market share. The report maintains Lenovo still has a shot at keeping the largest vendor crown for the year if current trends continue.

Back in 1999, Taiwanese companies shipped just 31 percent of netbooks worldwide, but heavy investment into China and R&D saw market share swell above 90 percent in 2010. If only IBM hadn’t sold its notebook businss, eh?